New York Chief Judge Jonathan Lippman [official profile] announced [statement, PDF] Wednesday a new court rule that requires lawyers to file a separate affirmation [form, PDF] confirming the accuracy of paperwork used in residential foreclosure cases. The new rule is effective immediately and has been added to the New York State Unified Court System [official website] residential foreclosure rules [text]. Lippman explained that the new rule is an effort to provide better protection [press release] to people facing the possibility of losing their home, particularly in response to the recent discoveries of errors in foreclosure documents nationwide. Lippman said the new rule "will play a vital role in ensuring that the documents judges rely on will be thoroughly examined, accurate, and error-free before any judge is asked to take the drastic step of foreclosure." Under the rule, lawyers must file an affirmation at different times depending on if the case is new, pending, or if the case has been decided but the property has not yet been sold. The new filing requirement will require lawyers to re-examine documents in 78,000 foreclosure cases [AP report] currently pending in the state.
Last week, attorneys general from all 50 states and the District of Columbia announced [joint statement, PDF] that they have formed a bipartisan group [JURIST report] called the Mortgage Foreclosure Multistate Group (MFMG), which will investigate allegations of procedural defects committed by mortgage loan companies during foreclosure processes. The MFMG explained that its investigation will focus on "robo-signing," a process by which individuals signed affidavits and other foreclosure documents without having personal knowledge of the facts and without confirming the accuracy of supporting documentation. The group asserted that such practices "constitute a deceptive act and/or an unfair practice." The MFMG will also look into allegations that affidavits were signed without a notary public being present, which is violative of state law. Investigations have already been underway in some states, and employees of several large lending companies have admitted in depositions that they failed to read documents prior to signing them [AP report]. Bank of America [corporate website] has placed a moratorium on foreclosure sales [statement] until the company has a chance to assess the accuracy of past foreclosure decisions and documentation. Wells Fargo [corporate website] announced [statement] last week that it would not place a moratorium on sales, stating that they frequently conduct reviews of their foreclosure practices and their affidavits have been accurate.